U.S. Equity Markets finished Tuesday higher after an incredibly volatile session. The NDX led the gains, closing 1.09% higher. Markets ended higher after surging early in the day on the release of November’s Consumer Price Index reading. The index showed softer-than-expected inflation growth, with November’s annual increase coming in at 7.1% compared with October’s 7.7% gain. Much of the decline was driven by medical care, airline fares, and used vehicles. Meanwhile, food and shelter costs continue to buoy higher headline inflation. Investors reacted strongly, as today’s Federal Reserve meeting will mostly likely kick off with a 50-basis-point rate hike. We continue to see signs that the worst of high inflation could be behind us, with the latest Bank of America Global Fund Manager Survey showing that bearish sentiment about the economy eased in November. Within the S&P 500 Index, 10 of the 11 sectors finished higher. European Markets closed positive. Euro-Zone Markets ended the day higher, following momentum from the U.S.’s soft inflation reading. Investors are now anticipating that the Fed’s rate policy may pivot away from that of the European Central Bank and Bank of England (“BOE”). Furthermore, U.K. wage growth was better than expected, putting more pressure on the BOE to raise rates amidst a tight labour market. Meanwhile, German ZEW economic sentiment improved for the third straight month, hitting its best reading since February. In Asia, Asian Markets ended largely mixed, as investors are keeping an eye on U.S. inflation data. Chinese reopening plans and economic-activity forecasts continue to dominate investors’ speculation in the region. Following weeks of positive sentiment regarding reopening plans, infections are surging again and causing angst amongst investors fearful of a reversal to stricter “zero-COVID” policies. Elsewhere, Australian Consumer Confidence rose in December from a near-historical low in November. Elsewhere, Oil rose 2.73%, while a weaker Dollar saw Gold end yesterday’s session with a 1.67% gain.
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For anyone following my Platinum Service it made 30 points yesterday and is now ahead by 1511 points for December after closing November with a gain of 4789 points, while finishing October with a record gain of 9619 points, making 6660 points in September, after closing August with a gain of 2228 points, having made 2660 points in July, following a gain of 3371 points in June. The Service made 3651 points in May, after making 762 points in April, following a gain of 5883 points in March. The Platinum Service made an impressive 5324 points in February, after ending January with a gain of 3878 points, more than making up for December’s 932 points loss. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points. I have a YouTube Channel which contains recent interviews I have given This can be viewed by clicking HERE Please subscribe to this for new interview notification
Equities
The S&P 500 closed 0.73% higher at a price of 4019
The Dow Jones Industrial Average closed 103 points higher for a 0.3% gain at a price of 34,108.
The NASDAQ 100 closed 1.09% higher at a price of 11,834.
The Stoxx Europe 600 Index closed 1.29% higher.
This morning, the MSCI Asia Pacific Index rose 0.6%.
This morning, the Nikkei closed 0.72% higher at a price of 28,156.
Currencies
The Bloomberg Dollar Spot Index closed 0.9% lower.
The Euro closed 0.8% higher at $1.0632.
The British Pound closed 0.6% higher at 1.2350.
The Japanese Yen rose 1.1% closing at $135.70.
Bonds
Germany’s 10-year yield closed 5 basis points lower at 1.90%.
Britain’s 10-year yield closed 9 basis points higher at 3.29%.
U.S.10 Year Treasury closed 10 basis points lower at 3.50%.
Commodities
West Texas Intermediate crude closed 2.73% higher at $75.16 a barrel.
Gold closed 1.67% higher at $1812.10 an ounce.
This morning on the Economic Front we already had the release of U.K. November yoy CPI Inflation which came in at +10.7% versus +10.9% expected. At 10.00 am we have Euro-Zone Industrial Production, followed by U.S. MBA Mortgage Applications at 12.00 pm. Next, we have the Import/Export Price Index at 1.30 pm. Finally, we have the FOMC Rate Decision at 7.00 pm followed by the Powell Press Conference at 7.30 pm.
Cash S&P 500
I cannot remember the last time I saw the S&P surge over 2% following the release of U.S. CPI, hitting a high at 4137, before reversing all of these gains to close Monday’s Chicago Gap with a low at 3993 before having a bunch of chop. This was an uncomfortable day as the S&P again closed below its 200 Day MA (4033) while a late sell-off saw the VIX close 10% lower after reversing all of Monday’s spike higher. The ramp up came of course on lower-than-expected CPI and the spike was so violent it ripped through stops in seconds, but the subsequent reversal was so fast, almost 70 Handles in minutes it gave few traders a chance to take advantage of the spike higher. This is a violent tricky market as we wait for today’s 50 Basis Points rate hike from the Fed coupled with Powell’s press conference at 7.30 pm. I am still flat as I never got involved yesterday. Today, I will raise my buy level to 3972/3987 with a 3959 wider ‘’Closing Stop’’ As we have the September Futures and Options on Friday, dips should be bought. I still have no interest in being short the S&P at this time.
EUR/USD
I am still flat. The Euro is severely overbought. The 14-Day RSI closed at 69 last night. We have resistance from 1.0700/1.0770 where I will be a seller with a 1.0825 ‘’Closing Stop’’. I am looking for the Euro to test its 200 Day MA (1.0350) before moving higher into January. I will continue to be an aggressive buyer from 1.0370/1.0440 with the same 1.0295 ‘’Closing Stop’’.
March Dollar Index
The Dollar got hit hard yesterday, trading the whole of my buy range for a now 1.0370 average long position. I will leave my 102.95 ‘’Closing Stop’’ unchanged while lowering my T./P level to 104.25
Cash DAX
I am still flat the DAX as the market continues to trade in a narrow range. I still do not like the price action given that we are still overbought following November’s massive move higher. If it was not for the seasonal strong period of the year I would be looking to put on a Macro short position. However, this will have to wait until next month. Ahead of the Fed I will raise my buy level slightly to 14220/14310 with a higher 14145 ‘’Closing Stop’’.
Cash FTSE
No Change. The FTSE missed yesterday’s sell level by 18 points before having an 80-point fall and I am still flat. I will now lower my sell level to 7530/7600 with a lower 7655 ‘’Closing Stop’. The FTSE has support from 7340/7410 where I will again be a buyer with a lower 7285 ‘’Closing Stop’’.
Dow Rolling Contract
Frustratingly, the Dow missed yesterday’s buy range by 70 points before having a nice 400-point rally off its 33890 low print and I am still flat. I will now raise my buy level to 33700/33960 with a higher 33555 ‘’Closing Stop’’. I still do not want to be short the Dow at this time.
Cash NASDAQ 100
I am still flat. The NDX had a wild session, trading higher by over 4% at one stage before selling off to close with a 1% gain. I will now raise my buy level to 11620/11770 with a higher 11495 ‘’Closing Stop’’.
March BUND
The Bund rallied to my too tight 140.80 T/P level on my latest 140.50 average long position and I am now flat. The Bund has support from 139.40/140.10 where I will again be a buyer with a 138.95 tight ‘’Closing Stop’’.
Gold Rolling Contract
Gold surged yesterday and I am still flat. I will now raise my buy level to 1775/1790 with a tight 1763 ‘’Closing Stop’’.
Silver Rolling Contract
No Change. I am still a strong buyer on any dip lower to 22.50/23.25 with no stop. Remember, Silver has strong resistance from 24.00/25.50 which needs to be broken before I can set higher targets levels.
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